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Senior services could face big state cuts

Lester Skipinaday and Jim Hensel appear to be playing poker at Heritage Thursday. It's actually a game called "Flip It" that sharpens memory, range of motion and math skills for nursing home residents. (Sarah Smith / Enterprise)

Deep cuts to a growth industry about to see a wave of Baby Boomers has nursing home administrators concerned for their futures: Who will take care of Gramma?

Gov. Mark Dayton proposes, even after finding $1.2 billion in the state couch cushions, to annihilate a $5 billion deficit through cuts that could fall most heavily on the elderly, cutting funds to nursing homes and assisted living facilities.

That's at a time when the elderly population is rising at a steady rate.

"Everything we're buying is going up, the least of which is food," he said. "Medical supplies, everything comes by truck. The fuel prices are definitely going to affect us, the food prices, especially fresh produce, are going through the roof. We're running a big kitchen. Everybody's experiencing it at home and we're experiencing it on a larger scale."

"The Republicans are going to make their own budget proposal and we're fearful with that because philosophically they don't want to increase taxes," he said. "We think that will be released in a couple of weeks. This could have even greater implications than Gov. Dayton's budget proposal has in store for us."

Hansen, too, is feeling some measure of relief these days, but barely.

Heritage, under Dayton's first budget proposal, stood to lose $250,000 of the campus' $4 million annual budget.

The revised Dayton budget would cost Heritage around $100,000 at a time when funding increases to nursing homes have trickled in while costs skyrocketed.

Put into perspective, Hansen said the facility is dealing with 2008 revenues, but 2011 expenditures. In that three years, salaries and costs have risen.

"You know, we're like most of the providers," Hansen acknowledged. "Let's put it this way, most nursing providers in the state are 'challenged' to 'struggling.' That might be the best way to put it.

"The implications of this potential reduction is that there are operations that are considering or going out of business as a nursing home," Hansen said.

"Salaries are our biggest expense so that would obviously have to be part of the mix of anything we do to make a significant cut," Erickson said. "We're praying a lot."

Another expense for nursing homes would rise under the Dayton proposal. It's an $8 per day bed surcharge that facilities pay whether the beds are occupied or not. Those funds go into the state general fund, not into the Health and Human Services budget. Dayton's plan would raise those charges to $11 per day, per bed.

"So that's a double whammy," Hansen said. "It's not just nursing homes, it's senior services across the board. Elderly waiver monies, home community based service reductions... They were originally proposing cutting them 4.5 percent. Now it sounds like with Dayton's proposal and the new forecast they're going to educe it 2 percent. Customized living was a 10 percent proposed cut and now they're down to 2 percent. So it's not just the skilled side. It's all services."

"You look at the number of people that will be retiring in the next 10 years, I can understand why they're afraid of it," Erickson said. "That means somebody better do some long-range planning. Something's gonna have to change."

Erickson said cuts at a time when the elderly population keeps burgeoning are shortsighted.

Where will Gramma go if the continuum of care cycle is broken?

"The elderly are being held captive," Erickson said. "If the industry is destroyed where are those people (Baby Boomers) going to get care?"

"That's a good question," Hansen said. "You know along with these decisions that are being made financially, our legislators better have some remedies to our growing senior population."

Better start clearing out the spare bedroom. Adult children may bear the brunt of these cuts.

"It will be very hard for people who are at home to have 24-hour care," Olson warned.